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Abstract
Package downsizing is common among the leading producers of packaged food products
in the United States. In this study, we examine the effects of package downsizing on
household food-at-home consumption and expenditure. We perform an exploratory data
analysis of shelf stable tuna and peanut butter markets using Nielsen homescan data. The
data comprise grocery store transactions made by a large panel of households over a
period of 7 years, 2004-2010. We find that manufacturers use downsizing to implicitly
increase prices. Consequently, the average annual household expenditures of both
products are considerably higher than their levels before downsizing. The annual average
volume consumption of peanut butter remains stable, whereas the volume consumption of
shelf stable tuna is approximately 10 percent below its level before downsizing, in spite
of an approximately 5 percent increase in the annual package consumption.